In today’s Bitcoin analysis, we look at the ongoing bear market and look for early signs of its end before a bullish recovery. I wonder if it is possible that the bottom has already been reached, or if the bitcoin price will face even lower in Q4 2022. Finally, we try to determine how will the price of bitcoin evolve at the beginning of 2023 and if there is any chance of a bullrun taking shape.
Analysis of the Bitcoin Bear Market
Renowned cryptocurrency market analyst @intocryptoverse polled over 700,000 of his Twitter followers. In the poll, he asked the question “How do you feel going into the fourth quarter for BTC?” and left the choice between two answers: bullish or bearish. 11,299 respondents expressed their feelings, most expect further reductions :
How do you feel going into Q4 #BTC?
—Benjamin Cowen (@intocryptoverse) October 1, 2022
The expectations remain on the price of Bitcoin in general, despite technical and on-chain indicators increasingly suggesting that the bottom is near or has already been reached. On the other hand, there are still strong arguments and indicators that indicate that the absolute bottom of this bear market is yet to come.
Anyway, another crypto analyst, @rektcapital, posted data regarding the duration of the historical Bitcoin bearer markets. According to his calculations, the period during which BTC lost value in this cycle it has already reached a period comparable to previous bear markets :
- 2013-2014: 413 days from peak to trough with 86% decline from peak.
- 2017-2018: 364 days from peak to trough, 84% drop from peak.
- 2021-2022: 333 days from peak to date, recording a 74% drop from peak to date.
“These numbers suggest that BTC should bottom out in the next 1-3 months,” he says.
A closer look at Bitcoin’s 3-month log chart confirms the analyst’s views. After every historical Bitcoin peak, the market remained marked for several quarters. Moreover, it is normal total lows are reached about a year after the peakat the turn of the fourth quarter and the first quarter.
It should also be mentioned that the bull market did not properly start after the trough was reached, but the accumulation continued for another 2 or 3 quarters. This means that even if the bottom of this crop market has already been reached or is about to be reached, don’t expect huge increases in the first months of 2023.
Current Bitcoin Cycle vs 2019 Cycle
Another strategy to determine the stage of the current bear market is to try to find similarities between the current price action and the 2018-2019 bull market. @StockmoneyL recently provided an interesting analysis, which a parallel is found in the dynamics of the last 3 cycles.
According to him, Bitcoin is currently in a buying phase of about six months. Historically, this is the period of least risk and greatest opportunity for future upside. The bullish Bitcoin forecast from this analysis is that the $19,000 level will hold as support, and the bottom has already been reached..
The same analyst, in another tweet, posted a BTC price chart near the end of 2018-2019 and today’s price action. Among the many similarities are the steep drop from the 40-50% support zone and the way the bottom was generated.
In both cases, it can be noted that the initial bottom, and total, as it turned out later, was subsequently at a higher bottom in the chart. After that there was a consolidation phase of several months, then more dynamic increases. If this scenario were to repeat itself now, Q4 2022 would be a period of consolidation and accumulation. The bull market could only begin in the first quarter of 2023.
Source: Lizards Stockmoney
The First Signs of Bitcoin’s Bottom Forming
It is the ultimate way to find bear market end signals and trend reversals on a Bitcoin chart long-term technical indicators. One of them is the monthly MACD, which provided a very clear trend reversal signal during the previous 2018-2019 bear market.
This was pointed out by @el_crypto_prof, who compared the MACDs of February 2019 and October 2022. According to him, the change of the negative bar of the MACD histogram from dark red to light was a sign of the end of a bear market. A similar signal could be generated this month if Bitcoin at least maintains its current level., close to $20,000. However, we won’t know until the end of this month.
Another signal is provided by the weekly RSI indicator, which was interpreted by the same analyst who tweeted. According to him, the fall in the weekly RSI to the oversold zone below 30 is the signal for the bottom of the market. This happened three times, during the market lows of 2015 and 2018, and then again in 2022. It should be noted that in all three cases, the lowest RSI value occurred in the month of June 2022. However, the indicator was still slowly rising. Bitcoin price action sideways and several months of consolidation. This also reinforces the thesis of a bull market rally in Q1 2023 at the earliest.
